Saturday, October 23, 2010

Stock Index Chart Patterns - BSE Sectoral Indices, Oct 22, '10

BSE Auto Index

The BSE Auto index chart continues its strong upward move. A bit of correction set in after touching another new high in Oct ‘10. The 20 day EMA has provided good support. The RSI has dropped below the 50% level and is making lower top and bottoms. The correction may not be over yet.

BSE Bankex

The BSE Bankex chart also touched a new high this month before starting to correct. It dropped below the 20 day EMA before recovering. The RSI is making lower tops and bottoms and has fallen below the 50% level. The index may correct some more.

BSE Capital Goods Index

The BSE Capital Goods index touched a new high in Oct ‘10 before correcting sharply down to the 50 day EMA.. Though the index has made higher tops and bottoms last week, the RSI has done the opposite – making lower tops and bottoms and hinting at a longer correction.

BSE Consumer Durables Index

The BSE Consumer Durables index fell less sharply after touching a new high. But even as it tries to recover, the RSI is diving towards the oversold zone.

BSE FMCG Index

The BSE FMCG index made a new high right at the beginning of the month and immediately started a correction that went down to the rising 50 day EMA. The RSI bounced up after touching the oversold zone, but remains below the 50% level – which is bearish.

BSE Healthcare Index

The BSE Healthcare index chart has been the outstanding performer in Oct ‘10. The RSI is in the overbought zone, but it has made a lower top as the index made a new high. A correction may be around the corner.

BSE IT Index

The BSE IT index also made a new high in Oct ‘10, dropped like a stone below the 20 day EMA and then recovered quickly. The RSI has bounced up after touching the 50% level – which is a bullish sign.

BSE Metal Index

The BSE Metal index chart rose higher during the month, but failed to get close to its 52 week high of Apr ‘10. It started a correction and is currently below the 20 day EMA. The RSI has rapidly fallen below the 50% level. The chart seems to be forming the ‘handle’ of a bullish cup-and-handle pattern.

BSE Midcap Index

The BSE Midcap index chart is performing quite well, touching a new high, correcting down to the 20 day EMA and almost recovering its losses. The RSI has made a series of lower tops in the overbought zone as the index has moved higher during the past 3 months, but is above the 50% level.

BSE Oil & Gas Index

Finally, some action from the BSE Oil & Gas index chart. It reached a new high in Oct ‘10, dropped below the 20 day EMA and is testing its high. The RSI is showing negative divergence but is above the 50% level.

BSE Power Index

The BSE Power index chart flattered only to deceive. It touched a 52 week high and immediately started falling and slipped below the 50 day EMA. It has recovered up to the 20 day EMA, but the RSI is headed down to the oversold zone – indicating that the correction may not be over.

BSE PSU Index

The BSE PSU index chart is in the process of forming the ‘handle’ of a bullish cup-and-handle pattern. It made a new high this month before dropping below the 20 day EMA. The RSI is just below the 50% level.

BSE Realty Index

The BSE Realty index chart is the underperformer of the group – making a series of higher tops and bottoms since the low in May ‘10 but failing to reach a new 52 week high. The recent correction has dropped the index below the 20 day EMA. The RSI has quickly fallen below the 50% level.

BSE Smallcap Index

The BSE Smallcap index chart is performing well, much like its Midcap counterpart. The RSI has made lower tops in the overbought zone in the past 3 months, and is just below the overbought zone.

The chart patterns of the BSE Sectoral indices are in corrective modes after touching new highs. The BSE Healthcare index gets the ‘chart of the month’ award.